Annex Leaders: The Sport Business Summit Keynote speech by Yousef Al-Obaidly, CEO of beIN Media Group October 8, 2019 Leaders: The Sport Business Summit (Twickenham Stadium, London)
Keynote speech by Yousef Al-Obaidly, CEO of beIN MEDIA GROUP
Tuesday 8 October 2019
Ladies and gentlemen, good afternoon. It’s an honour to be speaking today amongst such distinguished guests, many of whom I’ve had the pleasure of knowing personally for many years. I’m proud to have spent my whole career developing the sports industry in markets all over the world, especially in the challenging but sports mad group of countries in the Middle East and North Africa, where I’m from and which is so close to my heart.
Collectively, thanks to a huge number of you here, we have helped build an industry that has no equal – sport is what people live for, whether to watch or to play or to share experiences. The top 25 global broadcasts ever watched are sporting events.
Nothing else has the capacity to engage, inspire, entertain and torment at the same time. You only have to look at some of the Champions League knock out games this spring, or the Cricket World Cup in
London and the Rugby World Cup in Japan. Recently beIN engaged the African continent with the
Africa Cup of Nations, where Algeria won the title in front of over 90 million people. I personally believe you cannot replicate these experiences in any other type of entertainment.
Along this road of growth, many organisations in this room have benefited financially – federations, leagues, broadcasters, sponsors, clubs; the list goes on. It’s a great story – it really has been a golden age for our industry.
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However, I’m afraid I have some bad news, and I say this as the head of the largest investor in managed rights in the world, overseeing over $15 billion in sports investments and having lived and breathed this industry for 20 years.
The glorious media rights bubble is about to burst. And while most people here think they’ve got their house in order, the truth is that our industry is completely unprepared.
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It might surprise you that I’m not going to describe beoutQ. If you don’t know what it is and who’s behind the most documented pirate operation to affect our industry, then – honestly speaking – you are probably not going to know what’s about to hit you.
Many fine journalists have constantly challenged Saudi Arabia’s deception and pursued the truth, in some cases in the face of personal threats. The Leaders’ investigations team has also published a detailed report on beoutQ for this conference – I strongly urge you to go and read it.
I’m here to explain how – despite all the warnings beIN has issued since the beginning of beoutQ and about piracy generally – how our industry and rights-holders in particular are still sleep-walking towards a financial cliff.
I’m here to tell you how the endless growth of sports rights is over. Not only that, but in certain cases, rights values are going drop off a cliff, and the very economic model of our industry is going to be re-written. Any rights-holders who think that the technology companies of the West Coast are their financial saviours are going to be swiftly disappointed.
This is all because our industry took too long to take piracy seriously, shown by the fact that beoutQ was fully operational for two years and is still partially operational today. And because at the end of these two years, the industry has not learned any lessons.
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The idea that rights valuations may stall is not new, but individual dips are explained by exceptional circumstances in particular markets or sports. There is also optimism about how West Coast
Technology Companies and the rise of OTT will open up brand new commercial opportunities. And there’s always DAZN, of course.
In fact, only last week, Rethink TV, a British analytics firm, made headlines by predicting that the total value of sports broadcasting rights is expected to reach $85bn in 2025, a 77% increase on today’s levels.
This is SO out of touch, it’s crazy. I simply don’t know where this money is going to come from!
This is because every deal needs (1) a combination of at least two bidders in a market, and (2) a level of exclusivity in line with the investment made. And while sometimes there are headwinds outside our control, these two factors do not exist.
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Seemingly, everyone in this industry is asleep at the wheel and refuses to confront the piracy elephant that’s been in the room for years.
We now live in a world where exclusive broadcast rights are, effectively, wholly non-exclusive.
Think about that: non-exclusive. Consumers, young and old, are accessing everything for nothing – via a kodi or a VPN or beoutQ – wherever they are, whenever they like, and this behaviour is being normalised.
And in this new world, it doesn’t matter what kind of broadcaster you are – if rights aren’t exclusive
Facebook and the FAANGs won’t be your saviour; OTT channels won’t bail you out; going direct-to- consumer won’t help; and established broadcasters won’t write another huge cheque. If you don’t protect your intellectual property, you have nothing.
Piracy has spread to every corner of the globe and every part of society. Last year almost 190 billion visits were made to pirate sites – just pause to think about that for a second. But I am not only talking about Wild West regions – it is happening under your very noses. In the top ten most pirating markets, alongside Russia, Brazil and Indonesia sits the UK, Germany and France. Top of the list is the
USA.
From another point of view, last year BBC research showed that 50% of fans in the UK had accessed
Premier League streams through unofficial providers; and a third of fans didn’t even know it was illegal!
These are commercial revenues that are being shop-lifted every day, AND shop-lifting is seen as acceptable behaviour by consumers.
All the while, an illegal sports economy is funded, with organised criminals getting richer and grassroots development getting poorer.
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In all of this, beoutQ is clearly the most shocking example. Ten live HD sports channels, distributed over satellite combined with an IPTV function; best in class set-top boxes with their own branding and marketing, tailored advertising, sophisticated subscription model and customer care services on social media; all being pirated by other pirates around the world – fully controlled and financed by a State. As a rights-holder, it is your worst nightmare. I said
3 earlier that you cannot replicate the live experience of sport – well, beoutQ has. Saudi Arabia has poured petrol onto the fire and they are now turning attention to embedding an illegal IPTV culture.
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And what has been the industry’s response?
In response to beoutQ, other than a handful of football rights-holders – most notably the Premier League and LaLiga – it has been shambolic. At first, it took almost a year for any rights-holder to say a single word; then for the past year it seems that a few angry words in a press release would hopefully stop beIN from complaining.
Let me remind you: beoutQ stole every single match in the UEFA Champions League for two years straight; every single match in the 2018 FIFA Men’s World Cup and the 2019 Women’s World Cup; almost every single major football league game in Europe. The NBA, the NFL, Formula 1, the Olympics, Wimbledon – I won’t go on. And apart from some slow legal responses and the occasional lobbying letter, the response from rights-holders is simply not enough.
In fact, the CEOs of Serie A and the Spanish FA continue to see no issue with hosting their flagship
Super Cup games in the very country that has been stealing the commercial rights of all their broadcast partners for over two year, destroying the value of the Italian and Spanish game in the process.
Amazingly, the Spanish FA is also completely undermining the great work that LaLiga has done.
In response to piracy generally putting beoutQ aside, the industry is paying lip service to the problem at best. It’s SO TIRING to hear from rights-holders that they have done everything beIN has asked, as if beIN has the primary responsibility to define and protect rights owners’ property. At the same time, rights-holders are the first to suggest innovative ways of increasing their content’s value, advanced new viewing technologies or new broadcasting slots or viral social activations – without once mentioning piracy which is their single greatest value destroyer. It is like playing a Champions League match but without a goalkeeper.
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So – what needs to happen? As broadcasters we simply rent your rights. Piracy is a collective problem and needs an industry-wide response.
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x First, anti-piracy staffing levels, capabilities and budgets should be your biggest priority.
I know that some rights-holders currently invest more in their Christmas parties than on anti-
piracy.
x Second, there should be cross-party collaboration on major legal reforms, including the
establishment of full copyright in broadcast signal.
x Third, CEOs of federations, leagues, clubs and broadcasters should all be shouting about
piracy from the roof-tops, and engaging their sports ministers and senior politicians on the
same.
x Fourth, consumers should be educated through bold public awareness campaigns. They
should know the direct implications of choosing a pirate service.
x Fifth, the pirates themselves should be shown that piracy cannot pay and they should be
publicly prosecuted. Cooperation with any governments aiding the pirates must end.
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This is my direct message to the industry and to rights-holders in particular. Take ownership – stop hiding behind your broadcasters. This is not a remote problem, these are YOUR rights that are being stolen as we sit here today.
In addition, as I have said to many rights-holders this past year, do not confuse words with actions, and do not confuse actions with results. beoutQ is the most embarrassing example of that – there are still over 3 million IPTV beoutQ set-top boxes all across the world, yet rights-holders constantly ask me when we are going to celebrate the fact that Arabsat is down. I sometimes wonder if beoutQ had been broadcast on a European satellite, whether rights-holders’ response would have been so disappointing.
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No doubt, a few sports rights may be lucky. But I’m afraid to tell you it’s too late to stop the correction that is coming to the value of media rights generally. If you don’t get your house in order and quickly, the sports rights market will disintegrate beyond recognition. In fact, winter is already here.
And I can tell you that as the largest buyer of sports rights in the world, because of beoutQ in
MENA and piracy generally, we now regard all sports rights as non-exclusive and our
5 commercial offers will reflect that. I am also confident that other broadcasters – of all shapes and sizes – will make similar devaluations, while many once-premium rights will remain unsold.
I will leave you with a real life example. Napster launched in 1999. At that time, no-one had any idea what was coming, and it took almost two decades for global music revenues to recover.
Now it is the sports industry that is at this critical juncture, and whether or not you respond in elevating anti-piracy from your backroom to your boardroom, will determine the very attendee list of this conference over the years to come. beIN will be here as we have not stopped in our fight against piracy. I very much hope you will be here with us too.
Thank you.
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Annex Saudi Arabia, Ministry of Municipal and Rural Affairs Announcement of 294 screens to broadcast World Cup Arabic original and English translation June 13, 2018 .JOJTUSZPG.VOJDJQBMBOE3VSBM"GGBJST
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